Pricing for wimps: Be the boss of your price
You may be the boss of your small business, but are you the boss of your price setting? For some soloists, clients are the ones that set the rate. So how can you regain control over what you charge?
There are many reasons for leaving the workplace and flying solo but one of the biggies is to be your own boss. Yet a few years down the track you might begin to feel you’re not really the boss at all.
Let’s take pricing as an example. So far, I’ve written articles on what to charge and how to charge it, all of which assume – since you’re the boss – that you are the one setting the prices. But what if you don’t get to decide the price at all. What if, um, the client decides it for you?
If you’re a freelance writer you might be familiar with this. Often it’s not you who sets the price; instead the publishing house tells you what the rate is and you accept it. Or not.
And it’s not just writers who find themselves in this situation. The increasing power of ‘procurement’ divisions in big business means that anyone working freelance for a big organisation can expect to be told the price that the company pays for “this type of work”.
Businesses that make stuff aren’t immune either. I remember years ago (when I was a little green) being shocked that a large British store told their supplier of white cotton shirts exactly what the purchase price would be. And I mean exactly. The supplier was my client and because the low price would completely stuff the business we tried to negotiate. “Take it or leave it,” came the rather curt reply.
"The bottom line is, if you want to be a price setter you have to be different."
So what can you do if you’re a soloist who wants to set their own prices?
The short answer is brutal: you need to move yourself from a ‘commodity for hire’ to a one-of-a-kind expert.
When a big business tells you what rate they will pay, they are looking for anyone – not you in particular – to do the work. They see you as replaceable. In their eyes if you don’t accept the work someone else equally good will. The bottom line is, if you want to be a price setter you have to be different.
And if you want to feel more like the boss of yourself, rather than an employee by a different name then I also suggest you widen your net. Try working with lots of small businesses rather than one or two big ones. I’m not suggesting this is an easy option: managing multiple clients is tricky and marketing yourself is time consuming. But that’s the price of running a small business rather than being a pseudo employee.
Have you been in a situation where the client dictate the price setting? Did you accept, or how did you turn the tables?
Read the full ‘Pricing for wimps’ series:
- Getting started
- Your minimum hourly rate
- How to get the price you want
- Should I charge the same as my competitors?
- The four-letter words that backfire
- Should I give a quantity discount?
- Do I have to charge everyone the same?
- Your customers’ biggest fear
- How to price for speed
- Raising prices